US-based lenders of Byju’s on Wednesday urged the National Company Law Tribunal (NCLT) to restrain the edtech firm from pledging, selling or transferring its shares.
The lenders, who have filed the insolvency plea through US-based non-bank loan agency Glas Trust Company LLC, told the NCLT that Byju’s was borrowing more money and alienating its shares in exchange, thereby causing grave prejudice to them.
Even after they filed the plea in February, promoter Byju Raveendran borrowed Rs 350 crore in exchange for some of his shares, the lenders alleged.
Since Raveendran was based in Dubai, they would be left with no one to prosecute and recover the money from if he continued borrowing money in exchange for shares, they said.
Noting that close to 10 insolvency petitions were pending against Byju’s in the Bengaluru bench of NCLT, the lenders said the cases spoke of the company’s financial condition.
The lenders urged the NCLT to pass an immediate stay order to protect their interests.
However, Byju’s countered the request by saying, it needed time to file a response to the plea.
The lenders’ claims were not substantiated by proof and the allegations were being made without giving the company and the promoter an opportunity to respond, Byju’s argued.
The case will next be heard on June 10.
Glas Trust represents over 100 lenders who loaned money to Byju’s’ US entity, Byju’s Alpha Inc, which is undergoing a voluntary bankruptcy process in a Delaware court.
According to senior advocate Uday Holla, who appeared for Glas Trust, Think and Learn, which operates Byju’s in India, stood guarantee to the $ 1.2-billion (Rs 8,000 crore) loan.
